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Lady Gaga Sale Stalls Amazon Servers

Lady Gaga has made herself a paragon of pop ambition and a spokeswoman for equal rights, but on Monday she became an unwitting symbol for something else: the pitfalls of cloud computing.

“Born This Way” (Interscope), her new album, arrived with a blitz of marketing, and Amazon surprised the singer’s fans by offering a one-day sale of the MP3 version of the album for 99 cents, a full $11 less than its price at iTunes, the Web’s dominant music retailer.

The discount was widely seen as a way for Amazon to promote its new Cloud Drive service, which allows users to store music files on remote servers and stream them over the Internet to their computer or smartphone. But Amazon may have underestimated the zeal (or thrift) of Lady Gaga’s fans. By early afternoon the company’s servers stalled, and many users were unable to download or listen to the album in full. Frustrated customers quickly took to Twitter and to Amazon’s user review page for “Born This Way.”

“Very disappointed,” a customer wrote in a one-star review of the album. “I guess next time I will pay full price and get the album immediately on iTunes.”

Amazon’s only public comment on the matter was a Twitter message, sent about 1:15 p.m. Eastern time: “We’re currently experiencing very high volume. If you order today, you will get the full @ladygaga album for $.99. Thanks for your patience.”

Most music companies see cloud services — which promise that all your music will be available on all your devices at any time — as the next frontier for the industry. And for the retailers and technology companies that will operate them, such services have become in important battleground. Google unveiled its own cloud service, Music Beta, this month, and Apple was said to be close to introducing its own.

Photo

Lady Gaga's new album, “Born This Way,” was offered as a download on Amazon for one day at 99 cents, $11 less than at iTunes.Credit
Nick Ansell/Press Association, via Associated Press

Amazon offers customers five free gigabytes of space on its Cloud Service and increases it to 20 gigabytes for customers who buy an album.

“What Amazon is trying to do is build up as much share as possible before Apple comes in,” said Russ Crupnick, an analyst with NPD Group, a market research firm.

Some analysts and music executives said the problem could affect confidence in an unfamiliar technology. Last month a variety of Web sites, from start-ups like GroupMe.com to The New York Times, were affected by a failure on servers that Amazon rents for cloud computing.

“It’s perhaps not a fatal flaw that this happened, but it certainly creates a challenge for them,” said Matthew Eastwood, an analyst at IDC, a firm that researches technology. “There is not a lot of forgiveness for things like this in the market. People will tend to move on and find other suppliers.”

Amazon introduced its MP3 store in 2007, but it has struggled to compete with iTunes. Late last year the NPD Group estimated that iTunes’s share of the digital download market was 66.2 percent and Amazon’s was 13.3 percent.

Amazon often sells albums through one-day promotions for $4 or $5. Music executives have said that Amazon usually accepts the loss if it sells an album for less than the wholesale price charged by the labels, which is typically around $7 an album but may be more for a priority release. Amazon declined to comment beyond its Twitter message, and a representative of Lady Gaga’s record label, Interscope, did not respond to e-mails requesting comment.

Other industry observers questioned whether Amazon’s error with Lady Gaga downloads would have a lasting effect on such a popular store.

“People are having a headache for one dollar,” said Tamara Conniff, a former editor of Billboard who is the founder of TheComet.com, a music news and opinion site. “They’d be willing to try it again for another dollar. Full price is another story.”

A version of this article appears in print on May 24, 2011, on page B3 of the New York edition with the headline: Lady Gaga Fans Swamp Amazon for a Cut-Rate Copy of a New Album. Order Reprints|Today's Paper|Subscribe